Apple CEO Steve Jobs to Take Medical Leave

Apple CEO Steve Jobs is taking a medical leave of absence from the company, according to an e-mail he sent to all Apple employees today.

"At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company," he said in the letter.

Tim Cook, Apple's chief operating officer, will be responsible for the company's day-to-day operations during his absence, Jobs said in the e-mail.

The e-mail did not specify the medical issue that Jobs is facing and it did not indicate an expected return date.
This absence marks the second time in the past few years the 55-year-old CEO has taken leave for medical reasons.

In January 2009, he stunned the technology world when he announced that he would be taking a six-month medical leave. (Cook also took over for Jobs during that absence.)

Famously private, Jobs did not initially disclose the reason for his leave in 2009, but later it was revealed that he had a liver transplant at a Memphis, Tenn., hospital. In 2004, doctors successfully treated Jobs for a rare form of pancreatic cancer.

What Would Happen to Apple Without Its Iconic CEO?

Despite his desire for privacy, the effect of Jobs' health on the well-being of the company has been a hot topic since he appeared at Apple's annual developer's conference in June 2008 looking noticeably gaunt.

Since then, the company's stock price has swung in direct response to news and rumors about the famed CEO's health.

Even though the markets in the U.S. are closed for the Martin Luther King holiday, traders in Europe reacted to news of Jobs' medical leave with strong negativity.

Shares of Apple on the German stock exchange closed down 7.96 percent today, erasing about $25 billion from the company's market share in short order.

Some analysts say that Apple without Jobs may be fine in the near future, thanks to an already established 10-year roadmap for product development. But in the long-term, they say the company could fundamentally change without its hard-driving, innovative founder.

"You get these iconic CEOs, where the company takes on their personality. And once that personality leaves, that company is never the same," said Rob Enderle, principal analyst at the Enderle Group.

With Jobs as Showman, Apple Thrives on Hits

For Apple, Jobs is more than the CEO. Since he co-founded the company with Steven Wozniak in 1976, he's been largely credited with giving the company its vision and infusing its products with Apple's signature style.

Much like a big-name movie director, whose name alone lends interest and excitement to whatever it is that he's pitching, Jobs (in his typical black turtleneck and jeans) is the one who grabs the public's attention every time he takes the stage, Enderle said.

But "when that director leaves, the movies tend to degrade," he said.

Unlike other consumer electronics companies that that live off of volume, Apple thrives on hits, Enderle said. Apple releases fewer products, but makes sure that whatever it does release has the maximum hit-potential.

"You remove him and they don't have anyone else like that," Enderle said. "And, to be clear, there may not be anyone else like that."

Just like the death of Walt Disney changed Disney forever, Enderle said, the permanent absence of Jobs would turn Apple into a company that's much more like the typical technology company. It may take years for the erosion to hit but, he said, over time it will be clear that without Jobs, the company will never be the same again.

"More products, a lower hit rate," he said. "That's the standard way of doing things because most companies don't have Steve Jobs."

Tim Bajarin, Silicon Valley analyst and president of Creative Strategies, said that in the near-term, Apple investors should have little to worry about.

"Tim Cook and Apple's executive team already showed that they can keep Apple humming in Steve's absence. I really don't think there will be any change," he said.

Any products due out in the next one to two years already have Jobs' approval, he said.

"Here's a guy who has lived and breathed Apple for the past 10 years. He understands Steve's thinking. He understands Steve's vision and I have no doubt that Apple would be fine for the next 2 to 5 years," he said.

Jobs: I Love Apple and Hope to Return As Soon As I Can

Since Jobs' return to work in June 2009, he has unveiled the iPhone 4, the newest MacBook air and his revolutionary iPad.

Jobs has not been seen at an Apple event since October 2010. When Verizon announced this month that it would carry Apple's iPhone, it was Cook – not Jobs – who represented Apple at the New York event.

During his 2009 absence, analysts said Apple and Cook did just fine, partly because Jobs was available for big decisions, partly because he has delegated day-to-day decisions for about five years.

In his e-mail today, Jobs said he has "great confidence" that Cook and the rest of the management team will do a "terrific job" in his absence.

"I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy," Jobs said in his company e-mail.